Australian Investor Concern on Climate Change Part of Global Trend

May 05 2021

Australian Investor Concern on Climate Change Part of Global Trend

Increasing focus on corporate lobbying on climate policy

Recent pushback in Australia against investors for actively engaging with companies over climate lobbying ignores the reality of the global trend towards ensuring corporations and their industry associations are adequately responding to the climate crisis.

Globally, this trend is being clearly observed in a number of ways, including:

In its 2021 Stewardship Expectations document, BlackRock said it would require companies to confirm that their political lobbying activities align with their public statements.

The number of lobbying-related shareholder resolutions has been rising every year, becoming the most popular among the climate-related resolutions monitored by InfluenceMap. Major companies around the world, including BHP, Duke Energy, Royal Dutch Shell, and Toyota, have either undertaken reviews or are in the process of reviewing their industry association positions on climate.

InfluenceMap’s Director Ed Collins said: “Investors are increasingly interested in the lobbying activities undertaken by companies and their industry associations, particularly as they relate to climate policy.

“The political influence of industries lagging behind on climate is understood to be a fundamental reason for the lack of credible progress towards the Paris Agreement’s goals.

“This is a trend being observed around the world – Australia is no different. Ignoring the reality of this will only leave Australian industries further behind in responding to the inevitable changes necessary to meet the Paris Agreement.”

The latest pushback in Australia is partly in response to the new climate change policy of the Australian Council of Superannuation Investors (ACSI), whose investor members collectively manage over $1 trillion in assets.

The policy states: "Companies should ensure their policy and advocacy activity is consistent with the goals of the Paris Agreement, including activity undertaken both directly and via industry associations."

A 2020 analysis by InfluenceMap shows that Australia's industry groups are having an overwhelmingly negative influence on climate policy, by lobbying to weaken or obstruct Paris-aligned legislation or regulations. Furthermore, Australian industry groups are among some of the most oppositional globally.

However, investor pressure is starting to bear fruit in Australia.

In October 2020, BHP and Origin Energy suspended their memberships to the Queensland Resources Council in response to its anti-Green party advertising campaign.

And in 2021, Norwegian oil and gas company Equinor exited the Australian Petroleum Production & Exploration Association (APPEA). In its 2020 review, the company identified it was misaligned with APPEA's position on a number of key climate policy areas, including carbon pricing and using carryover credits from the Kyoto Protocol.

Companies are under pressure to align their advocacy, both directly and via industry associations, with the goals of the Paris Agreement. Investor scrutiny of this process is critical to ensuring material and real-world improvements in corporate climate lobbying.

For further information or to arrange interviews, please contact:

Simon Cullen, Communications Manager, InfluenceMap (London)

simon.cullen( @ )